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Reliance considers DD-KG2 extension

Transocean will be relieved that Reliance is considering extending the $295,000/day contract of drillship DD-KG2, which ended on October 5.

"Rig rates and charges for services are at an all-time low,” says a source. “This is the best time to lock in contracts cheap.

The exact extension duration hasn’t been decided.” But he adds it will be for six to eight months at most, as Reliance will mainly use the rig to workover old wells or drill sidetracks at the D1 and D3 areas within the D6 block.

"No exploration, appraisal or development wells will be drilled," we hear. "Even developing R-Series (satellite fields within D6) is unviable at current gas prices.

" The domestic gas price fell to $3.82/mmbtu on a Gross Calorific Value basis for October 1 to March 31, 2016 in line with guidelines introduced last year. DD-KG2 will soon leave Indian waters for a mandatory seaworthiness certification, carried out every five years.